JPMorgan wary on Check Point acquisition

Check Point Software Technologies Ltd. faces a difficult test as it tries to digest its acquisition of Nokia Corp.'s online security business while the software market in Europe sags, a JPMorgan analyst said Wednesday.

Analyst Sterling Auty cut the company's rating to "Neutral" from "Overweight."

In a note Wednesday, he told clients that "management is in the heart of the integration challenges at a time (when) Europe broadly appears to be getting more challenging for most of software."

Check Point, based in Israel, agreed to buy Nokia's security business in December on undisclosed terms. Auty noted that Check Point does not have much acquisition experience "and the deals done the last five years have had varying degrees of success."

He said investors seem upbeat about the potential upside to the Nokia deal, setting up the potential for disappointment if there are any stumbling blocks.

Shares edged lower Wednesday, dropping 14 cents to $23.33 as the broader market made gains.